S.J. building pace shows big drop

Saturday

Feb 25, 2006 at 12:01 AM

Building permits for single-family homes in San Joaquin County were down even more sharply in January year-to-year than in December, a reflection of a slowdown that has some homebuilders cutting prices and offering incentives in the past couple of months.

Bruce Spence

Building permits for single-family homes in San Joaquin County were down even more sharply in January year-to-year than in December, a reflection of a slowdown that has some homebuilders cutting prices and offering incentives in the past couple of months.

A total of 322 construction permits were issued last month countywide, down nearly 40 percent from 533 in January 2005, according to the Construction Industry Research Board, which tracks the building sector in California.

That compares with a 27 percent drop from 463 home-building permits in December 2004 to 338 last December.

Builders say that fast-escalating prices are over as prices rose to levels that began putting off many potential buyers, even in this area, typically seen as one of the most affordable housing markets in this region.

Still, there's hope among builders that when the typical peak sales season kicks in next month, the market will be solid, if not good, though without annual price escalations that ran between 25 and 40 percent annually for the past several years.

"I see more people out looking in the last couple of weeks," said Heidi Mezenski, sales agent for Pacific Mountain Partners' Citrus at Mossdale Landing development in Lathrop. It could be the early springlike weather that tends to pull home buyers out, she said.

But demand will be back because homes here are still a good value, especially in a well-planned community such as Mossdale Landing, she said.

The San Ramone-based homebuilder hasn't marked down sales prices at its 134-lot Mossdale Landing development, which features three-, four- and five-bedroom models running in the $582,000 to $687,000 range.

Incentives have ranged between $10,000 and $40,000 per home in the past couple of months to prod sales, though, Mezenski said.

"We weren't doing incentives last summer," she said. "We were working off waiting lists."

The changed sales market had Oakland residents Stoney and Toni McCree checking out model homes in Mossdale Landing on Friday.

The McCrees, who don't own a home now, are aware of the slower market, and they not only think it's a good time to buy, but they also intend to take six months to do it.

Stoney McCree said he's not surprised that new homes are better deals these days.

"I eventually thought the housing market would hit a ceiling and prices would come down," he said. "I like the prices for what they're offering."

Toni McCree said they also liked the way homebuilder sales representatives seemed willing to deal, something they wouldn't have expected in the past.

They said they're still wondering about how commuting will wear on them and other such practical matters as whether there's a neighborhood school, whether winter fog gets bad and how safe the area might be from flooding.

Otherwise, this feels like a good time to buy, they said.

Appraiser Ravi Manrao, checking in Friday afternoon with a Beck Properties sales representative to do an appraisal, said there's no doubt in his mind that the sales market for new and existing homes has picked up in just the past two weeks, based on a recent surge of escrow closings in the area.

"I think that by the time June and July comes, you won't find any empty lots here."